Jan

28

So a search for Dunkin Donuts coffee references on the web led me to a blog post that posited an old conservative talking point: building the economy from the bottom up doesn’t work. To quote Political Pistachio:

Provide money to the poorest, I suppose, so that they can spend the money, and then as they buy goods it will somehow encourage businesses to produce more goods, and so on and so forth.

Since when does the bottom create jobs and produce goods?

Simple fact is that the creation of jobs and products comes from businesses, not from the bottom income earners. And the people who own businesses are in business to make a profit.

It’s kinda like the rhetorical question that goes “When did a poor person ever give you a job?”

The answer is – every time they buy groceries. Every time they pay a utility bill. Every time they buy a lousy cup of coffee at Dunkin Donuts, they are increasing demand which must be filled by supply which must be met by investing in creating new positions because you can’t keep up with the demand for your product with the people you’re already employing. It’s Econ 101, folks. You start a business in your garage making widgets. You can make 10 widgets a day by yourself. Thing is, people really really like your widgets. You can doodle along making 10 widgets a day and make a little money – or you can bring in a couple more people so you can make 50 widgets a day and make MORE money. And of course, you need more of the stuff that you make widgets out of, so the companies that make that stuff need to hire more workers and buy more raw materials and… you can see where this is going, right?

But no, says the Pistachio Patriot (I know it’s a patriot writing because of all the American flags on the background of the page). More quote:

The theory is that they will buy products, which will then theoretically put people to work to produce more products, and so forth.

People, however, don’t live like that. They live to their means. They buy everything on credit, sort of like the government does. So I am willing to bet you that what is going to happen when everyone receives their Obama Stimulus Checks from the IRS is that they are not going to go running down to their local Wal-Mart, or their local electronics store, and start gleefully buying things they had no interest in buying in the first place. They are going to apply those funds to their credit cards to pay down the balances, or they are going to pay down their furniture loan, or pay down their car loan, or pay down their mortgage line of credit, or they may just simply stick the extra money underneath their mattress and save it for a rainy day.

Here’s the thing. First, we’re not talking about “Obama Stimulus Checks” here. We’re talking about reducing payroll taxes to put more money in people’s pockets every week. We’re not talking about fancy shmancy electronics – most of which are now being made overseas to cut costs and increase profit margins because why make $5 on something when you can gouge workers, expose them to toxic substances, not pay any health care or Social Security costs and make $8 instead? We’re talking about, oh, I don’t know – food. And laundry detergent. And shampoo. And rent and gas and heating oil. Not as glamorous as imagining us all running out to buy microwaves and coffee pots and gadgets – but those are the things on which our economy actually runs. And when the grocery stores and clothing stores and corner coffee shops start failing (oh, wait – I mean the ones that Wal*Mart didn’t already KILL), that’s when we’ll be in some serious trouble.

So yeah. Trickle down economics doesn’t work. You can’t build a top-heavy economy where all the money gets sucked up and siphoned off out of the country in a huge reverse sucking toilet drain because – well, to quote the Pistachio Patriot again, “the business owners will just pack up and take their businesses out of the country where they feel they can make more profit.”

That’s not what WILL happen – that’s what’s BEEN happening. The fact of the matter is that big business has no loyalty or patriotism. They’re not in it to make America great again – they’re in it to fill their pockets, and if they have to do it by starving the country until the middle/working class gets down on its knees and accepts the natural dominance of those who have more money, then by jingo, they will. They’ll come stomp on our faces again when the other countries in the world decide that they don’t want polluted sludge for water and half their population dying of diseases related to unregulated exposure to toxic wastes and start regulating emissions and worker rights. By that time, we should be hungry enough to beg them to come spew their toxic shit all over our landscape and air and waterways again.

Then again, he also believes that business owners will increase supply which then will increase demand because more supply means lower prices – without realizing that when no one has money to buy, you end up with parking lots full of cars that no one can afford to buy. Wait. Don’t we already have that? Money put into food stamps and extended unemployment benefits goes RIGHT back into the economy. It keeps the supermarkets and diners and gas stations open. It keeps more people working – that’s SAVING jobs, which costs a lot less than creating them and negates the need for creating some of them. It keeps people from panicking and stuffing their nuts in their pillowcases and greases the wheels a bit so that business owners can see a reason to increase their supply – because, y’know, people have jobs and money to spend.